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April 2007 Presentations

April 4, 2007
SoundingBoard

Center for Multicultural Competence in Healthcare Organizations: helping hospitals enhance their care and share of diverse patient populations

CMCHO, which stands for Center for Multicultural Competence in Healthcare Organizations, helps hospitals enhance their care and share of today’s increasingly more diverse patient populations. This opportunity was presented by Larry James, founder and CEO. CMCHO is seeking $1.5 million in funding for sales & marketing to support a national launch; increased management/operational infrastructure; and general working capital.

Hospitals are experiencing an increasingly more competitive marketing environment with few opportunities for differentiation. Cultural competence is one of the few areas where they can differentiate themselves, as well as providing better services to diverse populations. CMCHO is a coalition of diverse healthcare thought leaders who provide assessment, training and tools for hospitals to address this issue. They currently serve 4 hospital systems representing 50 facilities and have raised approximately $400,000 to date.

The management team includes Larry James, who has 30 years in marketing and 15 in healthcare; Kathleen Gallon, a diversity training expert who consults in organizational development for Fortune 100 companies; Robert Miller, a healthcare marketing research expert; Toni Robinson Smith, also a trainer; Roland West, an advisor in diversity; and Thomas Scott, an advisor in cultural competency.

CMCHO services are based on the 14 standards for Culturally and Linguistically Appropriate Service (CLAS) issued by the Department of Health & Human Services in 2004. They include culturally competent care; language access service; and organizational support for cultural competence. Currently, four of these standards are mandated, but the other 10 are expected to be recommended as mandatory in the future.

In 2005, Americans spent $2 trillion on healthcare services, with half of this in hospitals. The market currently includes 6,000 hospitals and acute care facilities. About 10% of doctors and nurses are multicultural while 30% of the US currently is in this class, with this number growing to 50% by 2050. With morbidity and mortality rates higher among non-white populations, there is a huge opportunity for health care facilities to increase their ability to treat successfully this large and growing population.

CMCHO addresses the need for health care facilities to increase their Cultural Competence by providing the following services: organizational assessments; demographic mapping studies; community assessments; on-site organizational survey/certification programs; individual/group training & certification programs. The benefits provided to hospitals going through the program include enhanced quality of patient care, lowered cost of care by reducing errors, repeat procedures, and readmissions, lowered risk of litigation, increased productivity and profitability, and increased marketability, customer loyalty and competitiveness.

The business model is tiered to be flexible to meet differing budget levels. They market directly to C-level hospital administration and have multiple recurring revenue streams. Overhead is kept low through a strategic partnership with The Center for Cross-Cultural Health, a non-profit organization.

To date, CMCHO has 4 client hospital systems representing 50 facilities. They have a pipeline of $3 million in pending contracts representing 8 hospital systems and 80 facilities. Financials show projections of profitability by Year 2 and $10.6 million in gross revenue by 2011 with EBITDA of $3.2 million. Exit strategy for investors is a sale to a strategic or financial buyer.

Contact:
Lawrence W. James
513-563-3004
larry.james@cmcho.com